A tipster notes that the asking price for 318 Spear 8D (a resale studio in mid-rise building A at Infinity) has been reduced from $540,000 to $499,500. And while we can’t comment on the original contract price for this unit (tipsters?), we can comment on the fact that we haven’t been able to find any other listings for resale units in the development (although there are plenty of units being offered for rent).
$650 in HOAs for such a small space is pretty steep.
Didn’t One Rincon and Infinity have no-flip clauses in the contracts. How are people able to put their units back on the market so openly.
“job relocation” is one way to sell before 1 year mark.
the real question is why they ever built studios in this building in the first place.
does “luxury studio” apartment make sense to any of you?
as for the no-flip clause… what’s the developer going to do? sue? those contracts are hard as heck (hence expensive) to enforce
The way it is described, it was a very high end remodel.
If I subtract out $50K for the remodel (no interior photos so it’s hard to tell if that’s fair), I get $450K/536sq ft or $813psf. I suspect that’s pretty close to what they paid in the very early days, with their original price being what they paid plus the realtor’s fee and their closing costs.
A couple of people have posted they paid 800psf for a treetop. This is a top floor unit (which would run higher than average), and smaller units usually go for more psf (because the pricier kitchen and bath is more of a % of the total sq ft), so they may be taking a bit less than what they paid if it sells for asking.
How do you figure it’s a remodel? I seriously doubt it, knowing how hard it is to get anything thru the Infinity architecture committee and the fact that they’d have to close, THEN remodel, which doesn’t seem possible.
The “Arquitectonica Interiors” probably just means it’s the standard kitchen.
It also faces the interior courtyard, so no view.
I doubt it was remodeled. All the units have “Arquitectonica Interiors” and “high-end” appliances.
talking about luxury studios, check out 74 new mongomery with $600+ HOA with 0 parking space.
“does “luxury studio” apartment make sense to any of you?”
It does if you work in the city, live in the ‘burbs and want a place to crash on nights when you work late.
I guess the seller must have access to a digital camera and an internet connection, then why not showing pictures of the place instead of the artist renderings?
According to the floor plan map at the Infinity’s website, the unit is right next to the elevators. Not a real selling point.
Re: “‘does “luxury studio” apartment make sense to any of you?’ It does if you work in the city, live in the ‘burbs and want a place to crash on nights when you work late.”
At $500k, plus $650/mo HOA, plus approximately $475/mo in taxes, you could stay at the Ritz for less.
$500k, $650/mo HOA for a “sleeping alcove”??? What a deal! SIGN ME UP!!!
“At $500k, plus $650/mo HOA, plus approximately $475/mo in taxes, you could stay at the Ritz for less.”
If buying real estate, especially in SF, always made perfect economic sense, there would be absolutely no real estate business at all. The numbers don’t always have to work.
“If buying real estate, especially in SF, always made perfect economic sense, there would be absolutely no real estate business at all. The numbers don’t always have to work.”
The sound you just heard was my jaw hitting my desk. This isn’t some $50M trophy property we’re talking about, it’s a $500K condo. I can rent a larger unit in the Infinity for $2800/mo.
If the numbers don’t work, then why the hell would anybody buy this place? Is the new realtor argument really “it doesn’t make economic sense but you should buy anyway”?
if you work in the city, live in the ‘burbs and want a place to crash on nights when you work late.”
I guess…
but it would seem to me that the people who throw away this kind of money aren’t in the market for a studio.
the tax, interest and hoa alone is over $3,700. Throw the $100K down payment and principal and you’ve got a “real” bargain of a luxury sleeping alcove with no view. I guess that reality also hit home to the current buyer.
“if the numbers don’t work, then why the hell would anybody buy this place? Is the new realtor argument really “it doesn’t make economic sense but you should buy anyway”?”
By the way, I’m not a realtor and all I said was there are other reasons why people buy real estate. Why is buying a 2 bedroom for a million dollars in the same building any better an economic decision? Of course, it’s going to be cheaper to rent the same unit but that doesn’t stop countless people from buying real estate. Maybe, just maybe, people want to own something.
Re: “Maybe, just maybe, people want to own something.”
OK, then, buy a dog. The dog will love you back in a way this condo never will.
It doesn’t make perfect economic sense to own a BMW. It makes more economic sense to own a Honda Civic. It’s cheaper and more fuel efficient and still gets you from point A to B. So why do people still buy BMW’s? No,
500K for a studio is not a great deal but last time I checked that’s not too far off from what people will pay to live in these kinds of building. It’s not my choice but people do buy them for that price.
I certainly don’t think we should compare a 500sq ft studio to a luxury automobile, such as a BMW. Perhaps you should look at it this way – would you buy the crappy Honda Civic for $80,000, or would you lease the exact same Honda for $200 a month. Oh, and when you buy it, it’s certain to depreciate for the next few years. But sure, you’ll have that warm feeling of ownership….
“It doesn’t make perfect economic sense to own a BMW. It makes more economic sense to own a Honda Civic. It’s cheaper and more fuel efficient and still gets you from point A to B. So why do people still buy BMW’s?”
That’s horrible reasoning. Based on your car example the question would be whether or not people are willing to pay a premium to own the exact same BMW that somebody else rents for a discount. It’s usually the other way around.
Smarty – Your comparison has one major flaw. All cars depreciate, where as real estate if held for the long term will generally appreciate.
Others have said “why buy this studio when you can rent an equivalent one for less.”
One argument would be that the buyer believes in the long term strength of the SF real estate market and would rather put money towards owning property with the potential for appreciation instead of giving his/her money to a landlord.
I am not a realtor, an agent or property owner (yet) and I approve this message.
I thought the story was going to be this …
we can comment on the fact that we haven’t been able to find any other listings for resale units in the development (although there are plenty of resales at One Rincon Hill)
On a serious note, why are rents more expensive at the Infinity compared to One Rincon? I think both closed over 100+ units so far, but you see a lot of cheaper asking rents at ORH.
The point is that emotional factors are in play. The economists call it “psychological income.” Psychological Income is defined as the “non-functional benefit from a purchase” and it “represents how the product or service makes you feel”. See Gregory Karp.
I heard that One Rincon has 116 closings — but that’s just in lower floors 8-29. It still has the higher floors (30-60) yet to go. Infinity; however, has their entire tower available, but I heard still has closed fewer. Until they close they can’t be put back on the market or rented out.
“All cars depreciate,”
???? Tell that to my ’65 Vette. No, I believe I had it right. A Honda Civic will depreciate – just like a studio at the Infinity during this market crash over the next 5 years. Since my lease with the Honda will only last 3 years, I don’t really care what happens in the long run after that for either scenario – thus, the comparison ends there. And thus this comparison is flawless – thanks for playing, and have a good night.
Here’s my understanding on the closings at The Infinty (from speaking with Chicago Title, who’s handling the closings, and the HOA):
February – Btwn 28 -30 units
March – Approx 30 units
April – 78 units
Total of approximately 135 units closed. I haven’t heard of anyone walking away from their closings – any info out there? I also have the same observation that there are not many units listed as rentals – but certainly some.
Chip, you are most likely right One Rincon prob. closed more units than Infinity. What I find strange is that out of the 116 units closed, there’s 61 listings on Craigslist alone for either rent or for sale.
Is there a flood sale going on with the landlords at ORH? I know there’s a lot of investors but the differnce between the 2 buildings is huge. This site said the only resale at Infinity is the studio but I see at least 12 at ORH.
Is there a flood sale going on with the landlords at ORH? I know there’s a lot of investors but the differnce between the 2 buildings is huge. This site said the only resale at Infinity is the studio but I see at least 12 at ORH.
Of course time will tell, but I think Infinity may have had a smarter selling strategy–set the price fairly high and leave it there (I was told by the sales office that they’ve only had a couple of modest price increases throughout the sales process). ORH, by contrast, did the “blow out the doors and give them free drinks” strategy, which ultimately may backfire. Yes, they created a buzz and had a high number of contracts signed, but they may have a higher number of buyers that didn’t think through the purchase.
Ugly neighborhood, no view, so-so architecture, probably little sunlight and privacy.
But it’s “high end” and “luxury”.
The only thing they can sell are words.
So much for “Real” estate.
Would definately differ about your thought of the so-so archicture. Maybe not be your style but The Infinity is well designed – strong architect with a unique design. Modern. Striking. Unique on the SF skyline. With regards to the neighborhood – WalkScore rates it a 94 – tons to do, walk to, services, etc. (walkscore.com). Will only get better with the build out of the Folsom corridor. Love living here – steps to the Embarcadero to run, etc.
Beg to differ re “Ugly neighborhood”. I’ve lived on the Rincon/South Beach border and I’m moving back — very desirable neighborhood with great restaurants and many more on the way.
But will agree re lack of view, sunlight and privacy which is why I passed on buying one of these units (the better, similar though slightly larger, plan is in the other treetops building) when the sales office opened. Well that and the aforementioned high HOA fees which are more than $200 month higher than the fees for similar size units at Portside a block away. True, more lux amenities at Infinity but the market will tell over time whether prospective buyers think worth the price.
Given the state of the RE market and the economy as a whole, does anyone out there think there’s any appreciation left at Infinity or One Rincon? Are prices at these 2 developments maxed out for the next few years or are there still room to rise?
I plan to keep my unit for 3-5 years, I just would feel better if I knew my investment was appreciating rather than the opposite.
Luxury means a lot in this context. The neighborhood is upscale, the services in the Infinity are top notch, and the design and fixtures are quite nice. I have lived in some studio apartments in San Francisco which were not luxury at all and it showed. Even in a small studio, how much shag carpet can you take? Lowering the ceiling doesn’t help, but happens anyway. There are lots of things that can make a studio apartment unpleasant, and places with bad locations, dated design, and worn out appliances rent for a lot less.
I remember moving here from KS/OK in ’97 and couch surfing w/a family friend in south beach, right next to the then just opening, Portside development. If memory serves me right (it does escape me as I get older), I remember looking at units very similar to the one shown here that were selling for ~$250K and my chin hitting the floor: remember that I was coming directly from the complete opposite end of the spectrum where a quarter of a million gets you something very palatial. I haven’t looked into how resell values of the Portside units have done, but seems like an almost apples/unit to apples/unit comparison, it seems like there’s been substantial appreciation over the past 11 years.
Disclaimer: I am due to close in the same building at the Infinity in the near future (completed my walk through, etc.) and look forward to moving in!
“The sound you just heard was my jaw hitting my desk. This isn’t some $50M trophy property we’re talking about, it’s a $500K condo. I can rent a larger unit in the Infinity for $2800/mo.”
I’m kind of amazed that at this point people are not understanding the tax benefits of ownership. I’m deducting around 40% of prop tax & interest expense. So monthly costs are 60% of prop tax + Interest (60% * (2500+500)) + non-deductible HOA of 650. So that is $2450 to own your own place or “I can rent a larger unit in the Infinity for $2800/mo.”
Keep in mind that the $2800 is not rent controlled, so at a minimum, $336,000 would be pissed away over 10 years by renting the $2800 unit.
My Portside unit increased by 130% over the 10 years (recent actual sell price was just over 2.3 time the actual buy price). The building is rock solid and as a result the HOAs are extremely reasonable compared to other buildings in the area (no doorman); I am a fan of Portside for those reasons and more. I doubt that the unit appreciated on par with other neighborhoods in SF, but I enjoyed living there. I have priced the Infinity and think that the Infinity is priced about 15% higher/sq ft for a comparable unit. THe applicances are better at the Infinity without debate.
@mark d. “OK, then, buy a dog.”
Until I owned a condo buying a dog was never an option as I couldn’t have a dog in any of the 3 places I rented in SF.
While I wouldn’t buy this studio at this price, I am certainly glad I now own rather then rent, regardless of the rent-to-own financial calculation on my unit.
anon 8:17, run the numbers with your tax software or through your tax preparer. You are not receiving anywhere near the tax savings you think you are. Buying this place at this price would be a huge money loser over the next 10 years regardless of the tax implications unless real estate appreciates significantly during that time. Don’t bet on that. Prices are far more likely to decline over the next several years (especially for a small condo in this overbuilt market) and anything beyond that is a sheer guess.
“Buying this place at this price would be a huge money loser over the next 10 years regardless of the tax implications unless real estate appreciates significantly during that time. Don’t bet on that.”
Can you elaborate on this, otheranon? I am honestly curious to the logic on the 10 year horizon for significant appreciation in SF where it’s hard to see a huge glut of supply compared to other markets (Phoenix, Dallas, etc.). Any details are appreciated.
Just to chime on the numbers, lot of people at this site already talked about this a lot..
I guess my turn:
500K with 100K downpayment
as anon mentioned its around 2500$ (including tax deduction per month… I don’t know why some one in 40% tax bracket will live in a studio..well to each their own..)
Now, what could be the rent for this studio at this place..(if rincon is going for 2500$ for one bed, infinity for 2800$ for one bed) I am guessing 2200$ for a studio…
So, when you compound 300$ over 10 years for 100K downpayment interest(5%) compounded for 10 years you get around 200K.
If this studio doesn’t appreciate more than 200K over 10 years, then its a net loss. (well how about living happily for 10 years in a studio..Hmm, I would think lot of things might change in 10 years, like having a family, kids…So, someone wouldn’t really live in a studio, and that too in 40% tax bracket..)
“So monthly costs are 60% of prop tax + Interest (60% * (2500+500)) + non-deductible HOA of 650.”
Can you really get an interest only mortgage of $500K to make those numbers work? Adding principal to that payment would make a difference…
So, what happened to the lofty notion that ‘mother’ Tishman Speyer was going to “protect” all buyers at the Infinity? It’s a laughable concept that I’m surprized no-one else picked up on. I know the Mark Company’s job is to provide hype about this place, but the level of fellat*o that they have been performing on Tishman is beyond absurd. Tishman, like all developers, is simply out to protect THEMSELVES … and the only reason they would support prices is so that they don’t get totally obliterated on their investment in Tower II … or at least that’s the goal. Apparently this guy didn’t purchase the Tishman protection plan … $540K to $499K is around an 8% drop in about a month … ouch. While the Mark company definitely ‘handles’ these resales better, there’s far more of this happening behind closed doors [along with the rotating inventory … 90% sold in their dreams] than they are letting on.
I’m kind of amazed that at this point people are not understanding the tax benefits of ownership. I’m deducting around 40% of prop tax & interest expense. So monthly costs are 60% of prop tax + Interest (60% * (2500+500)) + non-deductible HOA of 650. So that is $2450 to own your own place or “I can rent a larger unit in the Infinity for $2800/mo.
There ARE tax benefits to ownership…BUT in my experience, what you save is essentially eaten up by property taxes. IOW, you end up getting a check from the IRS and sending it over to the city for property taxes. It’s a wash.
@ Infinityhype:
You’re not making sense. OF COURSE TS is in it for themselves, that’s WHY they want to protect their investment in tower 2 by managing the sales and resales (as much as possible) of tower 1. That’s not laughable at all. Note that they are also actively working on trying to get the post office parking lot developed. They are in it for the long haul. Does that mean that every single buyer at the Infinity will be “protected” and will not lose money? No, of course not. But I think it does mean that they aren’t some fly-by-night developer and are going to be around for a while.
Infinityhype,
Your mumble jumble made no sense. No doubt Tishman is protecting themselves as well as their buyers. Why wouldn’t they? They didn’t become one of the largest RE holders and fund managers in the world by making poor business decisions. And they will be developing in SF for the next 5-10+ years. I live in the area and look to them as the main catalyst to jump start the whole Folsom blvd corridor. Whether your an Infinty fan or not, Tishman is a big plus to the whole neighborhood and I can’t wait for them to finish Infinity and the post office lot. The much needed retail they’ll bring will benefit all the residences in the area.
I don’t recall who developed The Brannan but they ended up holding a substantial amount of inventory over a period of time after the dotcom bust — but I don’t think they compromised on pricepoint to move all of the units – eventually.
Something tells me that Tishman may well end up trying to play their hand in the same manner. But resales like this one that undercut them by a large margin are certainly going to complicate the picture.
The delta between new construction pricing vs. resale seems to be an ever widening divide and it’s not confined to this fine project.
Great point, AnonN. One conclusion that may be drawn is that experienced developers who plan projects over a period of years regardless of the hype in the market (such as Tishman) will realize the return they expected with all things remaining equal. If the market gets hot, they benefit, if the market cools significantly, they still have the option of extending the payback period or dropping the prices to accelerate sales — depends on how the numbers pencil out. But I don’t see any fire sales ocurring at the Infinity any time soon.
However, ORH seems to be in a different position and does not appear to be as well planned: the initial fire sale was due to a requirement that they demonstrate a certain percentage of commitments in order to secure the remaining financing required; delays on the 2nd tower were do to financing delays and cost increases on raw materials; they have had to switch contractors in mid-development, etc…
How much do you want to bet that Tishman locked in all their material contracts through completion of the 2nd tower and are now sitting pretty from a cost standpoint. Ultimately, it is factors such as these that will make the difference between the two developments in the long run and whether or not the bargain-seekers will get what they want.
Good point about the brannan holding out on prices thru the .com crash.. i dont know that infinity can do that. they have said they wont sell in the new building until the first building is all closed. with construction of the new building done pretty soon here, they either have to release those units at market prices (lower) or they have to cut prices on exisitng inventory. brannan didnt have that problem. either way the prices are going down.
Anon,
I think you are somewhat missing the point here. Tishman is an experienced developer that may hold its own in bull or bear markets. The issue is, how will individual buyers of their units do? The person in question here, perhaps selling due to relocation, is experiencing the downside of Tishman’s maneuvres. While Tishman has sold to him at $1000 per sq. ft., he’s finding out he got stuck with a unit at well above market prices. Upon attempting to resell the unit, he is feeling the pain, as he may not have the capital to wait out lower market prices … unlike the developer. If those that paid $1300 per sq. ft. for N.E. views were also forced to sell, they would most likely experience similar pain. This has been my issue with the Infinity all along – the developer may do okay, but the individual buyer most likely won’t at the prices that they are selling at.